What is a zombie company ?
If you’ve ever seen horror movies, you’ll know that when you see a zombie, you should start running! Well, the term is also used in the world of business to describe companies which are hugely indebted and only able to pay their fixed costs and interest, but not actually able to reduce the debt itself. Much like the horror film creatures, you could say these companies are neither dead nor alive. Their productivity is massively impacted and there’s a knock-on effect on the wider economy.
The phenomenon has been on the rise since the start of the Covid-19 pandemic, with some zombie companies only surviving thanks to government grants.
How was the term coined? How widespread is the problem? What are the negative consequences of zombie firms? In under 3 minutes, we answer your questions !
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A podcast written and realised by Joseph Chance.
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